service mgmt lec 1
TRANSCRIPT
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Nature of Services
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Service
The Service Process Matrix Service Package
Distinctive Characteristics of Service
Operations Classification of services for strategic insight
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Health Care hospital, medical practice, dentistry, eye care
Professional Services accounting, legal, architectural
Financial Services banking, investment advising, insurance
Hospitality restaurant, hotel/motel, bed & breakfast ski resort, rafting
Travel airline, travel agency, theme park
Others hair styling, pest control, plumbing, lawn maintenance,
counseling services, health club, interior design
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AService is a type of a product.
a deed performed by one party for another
Discussions about the marketing of goods applyto services as well.
Services have special characteristics that makethem different than products.
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Goods andServices: Scale of
Elemental Do
minance
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Services are classified across two dimensionsthat significantly affect the service deliveryprocess.
Degree of Labor IntensityRatio of labor cost to capital cost.
(Labor Intensive (High) and Capital Intensive (Low))
Degree of Customer Interaction andCustomization
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Degree of aborIntens ty
Degree of Interact on and Custom zat on
Low H gh
Service factory:
* Airines* Hote s
Service shop:
* Hospita s* Autorepair
Low
Mass service:
* Retailing* Schools
Professional service:
* Doctors* Architects
High
Managers of services in any category share similar challenges.
There are some differences as well.
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Supporting Facility
Facilitating Goods Information
Explicit Services
Implicit Services
Service Package
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Supporting Facility: The physical resources that
must be in place before a service can be sold.
Examples are golf course, ski lift, hospital, airplane.
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Facilitating Goods: The material consumed by the
buyer or items provided by the consumer. Examples
are food items, legal documents, golf clubs, medicalhistory.
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Explicit Services: Benefits readily observable by the
senses. The essential or intrinsic features. Examples
are quality of meal, attitude of the waiter, on-timedeparture.
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Implicit Services: Psychological benefits or extrinsic
features which the consumer may sense only vaguely.
Examples are privacy of loan office, security of a well
lighted parking lot.
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Intangibility
Services are ideas and concepts. Not patentable. Perceptions
Process Simultaneity
Created and consumed simultaneously. Cannot be stored
Heterogeneity
Variation of service from customer to customer
Perishability
Unused capacity is lost
Customer Participation in the Service
Attention to facility WebPortal feel
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1. Intangibility - u cant touch this
Services cannot be stored
Services cannot be protected through patents
- therefore a really great travel package and service can becopied
- a really great physical object can be patented, and NOT
allowed to be copied Hard to explain and display Services if you cant see them
Prices are difficult to set - depends on customers expectations
Distinctive Characteristics of Services
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1. Intangibility - u cant touch this
Marketing Strategies
stress tangible cues, e.g.. Smiling face use personal information, sources, references
use word-of-mouth
contact customers after they buy to stimulatecontinued enthusiasm and hope they talk it up
Distinctive Characteristics of Services
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2. Inseparability ofProduction (or
performing the service) andConsumption
(using the service) - happens at the same time
Many people involved in delivering a service
mass production of services is hard to do
Distinctive Characteristics of Services
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2.
Inseparabilityof
Prod
uctio
n (or performing theservice) andConsumption (using the service) -
happens at the same time
Marketing Strategies
Emphasize how much you train your people - so their ability togive you good service will be high
Have many locations, so customers can get to you
i.e.. Insurance sales personnel come to your home
Distinctive Characteristics of Services
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3.
Hetero
geneity - services are not always delivered thesame way
It is very difficult to standardize services
e.g..A machine can make ice cream cones a standard size
100% of the time
A person filling an ice cream cone with a scoop cannot do itthe same amount each time, unless you use a machine todispense the ice cream
Distinctive Characteristics of Services
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3. Heterogeneity - services are not alwaysdelivered the same way
It is very difficult to standardize services
e.g..ATaxi driver cannot drive you to the office inexactly the same time each day because the trafficpatterns change
e.g..A travel agent can sell you a vacationpackage - but cannot guarantee you will like thetrip exactly the same way another tourist did.
Distinctive Characteristics of Services
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4. Perishability - cannot be put in inventory orstored for later use
i.e.. You cant buy 2 haircuts
Demand fluctuates and changes, sometimesdepending on the season, or weather
e.g.. Taxi in the rain, vacation in summer
Distinctive Characteristics of Services
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Direct Recipient of the ServiceNature of
the Service Act P le ssessi nsPe ples ies:
Healt care Passengertransp rtati nBea ty sal nsExer ise clini sResta rants
Physi alp ssessi ns:
Freighttransp rtati nRepairand aintenan eVeterinary care
andscaping / gardeninga ndry anddry cleaning
angiblea ti ns
Pe ples inds:
Ed ati nBr ad astingInf r ati n servi es
heatersMuseu s
Intangibleassets:
Bankingegal servi es
Acc untingSe uritiesInsuran e
Intangiblea ti ns
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Type of Relationship between Service Organization and Its Customers
Nature ofService Delivery Membersh prelationship No formal relationship
InsuranceTelephone subscription
Electric UtilityBanking
Radiostation Police protection
LighthousePublic Highway
Continuous
delivery
ofservice
Long-distance phone calls
Theaterseries ticketsTransitpass
Airline frequent flyer
RestaurantPayphone
TollhighwayMovie theater
Public transportation
Discrete
transactions
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Ava a ty ofServ ceOut ets
NatureofInteractonbetweenCustomerandServ ceOrgan zaton Singe site utip e site
Custo ertrave s toservice organization
Theaterarbershop
Bus serviceFast- oodchain
Service provider
trave s to custo er
Ta iPest contro service
Maildelivery
E ergencyrepairs
Transaction isatar s length
Credit cardco panyLocalTVstation
BroadcastnetworkTelephone co pany
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The class will break into 5 groups and each group willbe assigned one of the service classifications (e.g.,nature of act, relationship with customer,customization, nature of demand, or method ofdelivery) to come up with an example for each ofthe four quadrants in the matrix.
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AForeign Institutional Investor (FII) Wants toinvest funds in India in the following sectors.How would you market these sectors to the FIIfor maximum fund investment?
1. Health Care2. Education3. Tourism4. Infrastructure Development
5. Entertainment6. Banking and Insurance7. Retail trade8. Communication
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Presentation should cover the following:1. Background of the sector (general details)
2. Development in the sector (past)3. Economic policies relating to the sector4. Scope of development (Future)5. Industry suggested for investment and the
reason for the same6. Competition in the selected industry7. Suggested Marketing Strategy
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